McDonalds in Colombia

Essay by MarkHens July 2006

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With over one hundred billion served, we have been the world's top fast food company for over thirty years. Our restaurants can be found in countries such as the United States, Mexico, France, England, China, and India. We have found that branching our product out to these areas throughout the world has been quite successful. Now we are testing a new market, Colombia. Colombia is found on the continent of South America, with a population of 44,533,300. We feel that this population is definitely in need of our vastly popular product. To survive in this market, we must do some things to set ourselves apart from the rest of our competition located there.

First, we must modify our product to fit the needs and the customs of Colombia. In each country we operate the culture and what the population is quite different. For instance in India, the residents do not eat beef because they view the cow as sacred.

Therefore, we don't use beef to make our hamburgers in India because it's against their customs but it still doesn't take away from the quality of our product. As known, coffee is the main drink in Colombia. So not only must we offer coffee throughout the day, we must offer the best tasting coffee (preferably Colombian coffee) the residents have tasted. If we don't modify our product, we may lose our market segment in Colombia.

When looking at the trademark of our name, the trademark which we have is granted by the government for five years and is renewable for successive five year periods. During renewal, we must show proof that the trademark is being used in an Andean Pact country. If not, it is subject to cancellation by the Division of Industrial Property.

In Colombia, corporations must pay a set tax rate of thirty percent. But if we venture into Colombia as a foreign enterprise, we only have to pay a twenty percent tax rate. Colombia has signed tax treaties providing double taxation with the United States, which would normally only require corporations to pay income tax in their country of domicile. But this treaty only covers international sea and air transportation. Therefore, we must pay income taxes in Colombia on things such as property. The property tax, known as the "unified property tax", has recently been consolidated. The rate is to be determined by each City Council and may range between one and 16 per thousand of the corresponding Real Estate assessed valuation.

When scheduling employees for work we must remember that Colombians are not noted for their punctuality. Therefore, we need to schedule our staff to fit the understanding that they will not show up on time for their shift and have our staff overlapping on shifts to ensure we have enough employees to fit the demand for our product. This practice may seem strange because we usually express promptness in everything we do.

Finally while operating in Colombia; we must remember to share some of our profit with the country. There is no limit on the amount of profit given, but in certain areas profit remittance during the first ten years of operation may be up to four percent over the current annual rates. If we follow these five important tips on business practices and customs in Colombia, our served total will definitely go up.